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Are you a New York resident looking for "debt consolidation loans" to get relief or to payoff your debts, including credit card debts and other types of unsecured debts (such as medical bills, department store charges, or even utilities)? If you are, you may be interested in finding out how much you could save without taking out a loan and adding to your debt -- and taking advantage of a variety of debt relief options that may meet your current needs.
These days, many consumers are getting relief from debts through debt consolidation, debt settlement, or debt consolidation loans. These debt relief methods have become popular alternatives to bankruptcy - which has a more damaging and longer lasting impact to personal credit. To find out which debt relief option is right for you and to calculate your potential monthly savings, total savings and the timetable to resolve your debts, simply estimate your debt amount online to get your free debt relief analysis and savings estimate.
The term "debt consolidation" represents a wide variety of debt relief options for many consumers. However, what it actually involves is combining, or "consolidating," credit card and unsecured debts into one, more affordable, and more manageable monthly payment made to a credit counseling agency. Many consumers also refer to debt consolidation as a debt management plan, or DMP. When you enroll in a debt consolidation program, credit counselors will review your finances, taking into account your debts, income, and then determine a reasonable amount that you can allocate to paying down your debts.
With a clearer understanding of your finances, credit counselors typically develop a strategy to help reduce your debts, and they do so by submitting proposals (on your behalf) to creditors asking for reduced interest rates, or the waiving or elimination of any late fees or penalties. The goal is to provide you with more lenient payment terms so that you can pay off your debts at an accelerated pace. Creditors that agree to the proposals are placed into the debt management plan.
The goal of debt consolidation is, with a single, more structured, and more affordable payment plan, you can, ideally, direct more of your payment to paying off the principal of your loans rather than just the interest - and eventually, reduce your debts sooner than if you continued making the monthly payments on your credit card debts at higher interest rates. If you are interested in finding out how much you can save every month through debt consolidation, request a free debt relief analysis and savings estimate - today. Start here.
Many consumers make the mistake of thinking that debt consolidation or debt management is the same as taking out a debt consolidation loan when, in fact, they are fundamentally two different approaches. As noted earlier, debt consolidation involves combining unsecured and credit card debts into a single, more affordable payment plan made to a credit counseling agency. In contrast, with a debt consolidation loan, you are combining all your high-interest debts into one, lower interest personal loan.
A debt consolidation loan involves taking unsecured debt and paying it off with funds that come via a "secured" loan. In other words, it is generally a loan where you would have put up your home or other asset as collateral. In many cases, consumers who get approved for a debt consolidation loan generally end up using their credit cards again. As a result, many of them will have new, high-interest credit card debts to deal with on top of their loan. In this scenario, a debt consolidation loan has generally made their debt situation go from bad to worse.
When you consider some of the hidden pitfalls that may occur when taking out a debt consolidation loan, it is generally wise to explore your other debt relief options - like debt consolidation - that not only helps you reduce your debts, but can also provide you with ideas on how to better manage your money.
Each individual's debt situation is unique, as are the reasons for racking up high-interest credit card debts. For many consumers, the reasons may vary from having lost or reduced income, rising medical expenses, or an unexpected personal crisis. But regardless of the reasons, debt consolidation may be able to help manage your debts and potentially lead to savings.
However, the amount of savings that you can potentially get, every month, depends on how much you owe, the current interest rates that you are paying, and any late fees or penalties. With a debt consolidation program, you will be provided with a more structured and more lenient repayment plan that can help you pay off your debts sooner than if you only continued to make the minimum monthly payments and at a pace that you can manage.
That's why it is a smart move to find out how debt consolidation can help as well as compare your debt relief options. Request a free debt relief analysis and savings estimate - now to get you started.
Debt consolidation is a debt relief option allowing individuals to combine or "consolidate" multiple higher-interest credit card, or other unsecured debts (such as medical bills, store or gas cards) into a single, more affordable payment each month. Typically, debt consolidation programs are coordinated by debt counselors who customize a "debt management plan" providing consumers with a proven and predictable path to get out of debt.
If you have multiple credit cards and other unsecured debts like medical bills, doctor bills, store cards, unsecured personal loans, and more – a debt consolidation program coordinated through a debt counselor may be the ideal debt relief option to help you live within a set budget, reduce debts, and get on a path to become debt-free.
How do debt consolidation programs, or debt management plans work?
Typically, debt consolidation programs are coordinated by debt relief specialists, or debt counselors, who conduct brief interviews with you to get details on your credit cards and other debts, as well as how much you can realistically afford to pay each month to get out of debt.
Based on this information, your debt specialist will then customize a "debt management plan" for you. Once you approve the plan, letters will be sent on your behalf to each of your creditors requesting the benefits of debt relief – such as lower interest rates, a waiving of late fees and penalties, and generally more favorable repayment terms. Those creditors who accept the proposals are then added to the debt consolidation or debt management program. For those that do not accept debt relief proposals, you are still obligated to live up to the original terms of your cardholder agreement.
It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt consolidation or debt management as part of your free debt relief analysis and savings estimate.
Debt settlement is a debt relief option that has become increasingly popular among people who need relief from high-balance credit cards (typically $20,000 to $125,000 or more). Through debt settlement, debt specialists negotiate with creditors on your behalf – with the goal of "settling" your credit card debt for substantially less than you currently owe.
If you have one or more high-balance credit cards and are going through financial hardship – credit card companies may agree to "settle" your credit card debt for substantially less than you currently owe.
How does debt settlement work? A debt relief specialist will review your current credit card debts and the amount of money you can afford to set aside each month to accumulate a "settlement fund". Debt specialists will then negotiate with credit card companies on your behalf with the goal of settling debt for substantially less than you currently owe.
How much debt settlement could potentially save depends largely on the amount of credit card debt involved, your current financial circumstances – and the settlement policies of credit card companies.
It's important to understand that, just as no two debt situations are exactly alike, no single debt solution is right for everyone. Your debt specialist can provide more details regarding debt settlement or debt negotiation as part of your free debt relief analysis and savings estimate.
There are many well-respected self-help credit and debt experts who provide a wealth of valuable advice on the wise use of credit and how to become debt free – experts such as Dave Ramsey, Suzie Orman, Clark Howard, and many others. But regardless of the system you follow – the first step in a successful do-it-yourself debt relief program is to do everything possible to live within your means – avoiding unnecessary "impulse" purchases that cause debts to spiral out-of-control. By creating and maintaining a realistic budget, you will avoid taking on additional debt.
In addition, you can take steps on your own to reduce existing debt by contacting creditors directly to request more favorable interest rates or terms, or offer to settle debt for less than the full amount owed.
The bottom line: If you have high-interest credit cards and other debts and are struggling to make ends meet – you are in need of debt relief. Whether you take advantage of a debt relief program such as debt consolidation or debt settlement, or commit yourself to take control of your finances and negotiate with creditors on your own – take positive steps today to get on the path to become debt-free.
Bankruptcy is generally considered to be the debt relief option of last resort. There are several types of bankruptcy: Chapter 7 (straight bankruptcy or liquidation), Chapter 13 (reorganization of debts), and Chapter 11 (debt reorganization normally used by a business or partnership). While a successful bankruptcy can provide a fresh financial start – individuals or businesses should carefully consider bankruptcy before proceeding because of its long-term financial implications.
While bankruptcy is a debt relief option that has been able to provide a fresh start for many individuals, families, and businesses – it is a serious decision that should be carefully considered with the assistance of a financial advisor or attorney who can help determine if bankruptcy is the proper course of action.
Prior to 2005, those filing bankruptcy could choose the type of bankruptcy they preferred – and most elected to file Chapter 7 straight bankruptcy (liquidation) over Chapter 13 (structured repayment). However, rules enacted in 2005 now requires those filing Chapter 7 to pass a "means test" – to qualify, they must earn equal to or less than the average monthly income for a family of their size in their state.
In addition, before you can file for Chapter 7 or Chapter 13 bankruptcy, you are now required to complete credit counseling with an agency that has been approved by the United States Trustee's office.
While bankruptcy plays a vital role to help rescue individuals and businesses, it is important to recognize that it's not the only debt relief option. A debt specialist can provide more details on debt relief alternatives to bankruptcy as part of your free debt relief analysis and savings estimate.